>> good thursday morning, this is bloomberg a break europe i'm tom mackenzie in london and these are the stories that set your agenda. asia stocks in the green as investors weigh beijing's latest stimulus measures. the fed hikes rates on its emergency lending program, cutting off the supply of cheap cash for commercial lenders. central bank bonanza. right decisions from south africa, turkey and the ecb. well christine lagarde offer any fresh signals on rate cuts? we bring analysis this hour. tesla shares get off the road after it misses on fourth-quarter earnings and warns of weaker sales growth for the year ahead. let's check on these markets. more earnings coming through. we have lines from the chipmaker in paris, st micro seeing first quarter net revenue at 3.6 billion u.s. dollars. missing the estimates of 4.0 8

billion u.s. dollars. we know that the auto segment for st micro will be very important. so we unpack these data points. fourth-quarter auto discrete revenues coming in slightly below the estimates. the auto segment it seems disappointing for the most recent quarter. the first quarter, net revenue, that is the forecast, 3.6 billion below the estimate of 4 billion. on the fourth-quarter line for been net revenue you are looking at 4.2 billion, the estimates had been four point 3 billion. a miss for the estimates for the fourth quarter for st micro, and a projection for the fourth quarter also coming in below estimates. let's check in on nokia, the telecom equipment maker. that company seeing full year 2024 adjusted operating profit of between two point 3 billion euros and 2.9 billion euros.

that is the redhead when it comes to nokia's results. let's get more lines for you. they have been challenged by the market in india. they have already warned that they will not be meeting the fully your outlook for sales operating margins and free cash flow. we know that their competitor earlier this week, ericsson, saying they are seeing some weakness from clients outside of china. full year for nokia adjusted operating profit of 2.3 billion to 2.9 billion, the adjusted operating profit for the fourth quarter coming in as a beat for nokia. above the estimates -- sales by the way coming in below the estimates, but again, it is the operating profit and be adjusted operating profit for the quarter that comes in as a beat for nokia. let's check on the broader markets after a fifth straight day of gains for the s&p. driven by netflix and some big

tech players within that segment. european feeders pointing to a loss of 0.1%, after gains yesterday, led by the likes of asml and s.a.p., listed in germany. it was a tech-led gains we saw across europe yesterday. we are waiting when it comes to the u.s. for a slew of data, particularly the gdp print later today. when it comes to macro policy, it is the ecb that is firmly in focus. let's look at the cross assets board. one asset to keep an eye on is the oil price, given the continuing geopolitical wrangles around the red sea. oil is back above $80 a barrel -- brent. the inventories falling quicker than infected on in the u.s. a one-month high for brent. euro-dollar in focus given that we have the ecb decision. no change expected, rate affected to hold at 4%, but it is the guidance that will be important. the single currency at 1.08, the

pound in focus at 1.27. oil at $80 a barrel. across the treasury curve, given the yields move yesterday, you are seeing yields coming in marginally around the five-year and 10-year, the 10-year at 4.15. there has been a positive session in asia. let's cross over to avril hong who is in singapore. what are you seeing across asian markets? avril: positive indeed. even the nikkei which saw heavy selling yesterday, the losses stemmed today. yesterday was getting a jolt from boj governor ueda.. the market i want to focus on is in china. it is a week that has been about stimulus talk, whether the premier called for more forceful measures, or the reports that we get a market rescue package. most recently, yesterday, that rrr reduction announcement from the pboc governor. that will kick in next month. the idea is to free up liquidity

for the lenders. reduce the amount of they have to hold is reserves, so they can lend to customers, buy bonds, support the chinese economy. it received mixed reviews but is helping put a floor on the chinese stock market. the csi 300 and hang seng building on gains from yesterday. after this rrr cut, we're seeing expectations ramped up of further easing. it looks like that's playing out in chinese government bonds, putting pressure on the offshore yuan but it wasn't just the rrr cut. let's look at some of the other measures we heard from chinese regulators. they will ease the way that chinese developers get access to commercial loans. it is providing financial support for chinese builders that have been struggling. a gauge listed in hong kong rising today. dollar bonds among them also climbing. this doesn't fix the problems in the chinese property sector. i want to take you back to 2015 because that was the time when we saw chinese authorities

coming through with a market rescue package. if we can look at the next page, and you will see how at the time, after the national team took its foot off the pedal, we saw the market then come down. it wasn't before the producer prices started recovering when the stock market started taking up and rebounding. we need to see growth and inflation recovering for a rebound in the chinese stock market. let's flip the board again. i want to zoom in on some earnings news. sk hynix, the world's second-largest memory chipmaker coming in with surprising profit, versus expectations of a loss. if you look at its price on the stock action, this is perhaps because of the higher capital expenditure expected, this could eat into profits. suppliers are rallying today though. tom: great market roundup. avril hong thank you indeed. let's get to the tesla story. shares slumping in late trade

after fourth-quarter earnings fell short, the ev maker warned of weaker sales growth this year, during his earnings call the ceo elon musk tried to sooth investor concerns about slowing demand teasing a new low-cost car. >> there's lots of opportunity in 2024. tesla is currently between two major growth waves. we are making sure our next growth wave driven by nexgen vehicles is executed as well as possible. tom: let's bring in bloomberg transport reporter daintily for the analysis. what were the takeaways from what we heard from elon musk? >> for tesla, not offering 2024 guidance. that is really summarizing the kind of warning of a notably slower year of growth in sales. investors have been used to to a compound annual growth rate of

50%. when you have sold 1.8 million vehicles the previous year in 2023, we're looking like we may land somewhere between 2.2 million vehicles. this for investors is a bit of a wake-up call. the slowing growth, the potential of slower sales when you look at his key market the u.s., is seeming averse to ev's right now. tesla is trying to prop up demand by wielding price cuts, for example. this has fed into a fourth-quarter which missed on earnings-per-share, missed on revenue. therefore, it's a downbeat earnings picture overall but when you have got one of the key metrics, automotive margins on

credit, it still came in higher than estimates. when tesla still has high margins. some of the best in the industry, so it's not all too bad out there. tom: the margin story is important context when you look across the sector. but investors have many reasons you have outlined to be gloomy on this stock. does tesla have any tricks up its sleeve than? >> what elon musk highlighted clearly is that tesla is working on a next generation platform for a lower cost electric vehicle. it confirms what has been reported elsewhere in the media that this is coming. but coming in late 2025. that's one production will start. there are many caveats in fact. whether tesla can get the right manufacturing it wants to get the most efficient production. it seems to be coming in at the latter stages of 22 me five. what we can characterize in this

2024 period given the slower growth expected is a year of transition. elon musk is tempering expectations of 2024 being as good as previous years. still growing, but not as well as it probably should have. but with the new product line with the cybertruck, for exam look, there is still a lot to look forward to but it is 2025 and beyond. tom: a year of transition for tesla. excellent round up there. let's get to the monetary policy, the decisions from the central banks. the ecb expect it to keep borrowing costs on hold for a third meeting later today. for more, we got our correspondent maria tadeo who is on the ground in frankfurt at the ecb. much more important than the decision holding pat, it is about the forecast commentary, what are you going to be looking out for? maria: when it comes to the monetary policy decision, we know it's going to be a hold.

that is the third consecutive meeting we have seen the european central bank keeping rates unchanged. they stretched this theme of hire for longer, but the focus for markets as you know, is on the cuts. this is a question of when. it's about the timing. that is the key going into this meeting. we already heard from the head of the european central bank, going back to that interview in davos with bloomberg, with francine, saying this is highly likely going to be a summer move downwards. summer means june specifically june 21. there is a european central bank meeting that month. that could point to the timeline. this is now a summer story. it will be interesting to see whether the head of the ecb repeats that language. what is clear is that when you listen to the governing council, and remember, we had so much ecb talk before the quiet period really pushing against expectations of an early rate

cut. this central bank says it is not going to be a key situation. you may have to wait for cuts to come. the message has been the ecb is not in a rush, and will not be rushed, a lot of that will depend on this delicate balancing act between inflation but also the economic expectations for the euro area. tom: the tension between the markets and the ecb. maria tadeo bringing us coverage throughout the day of that decision and the press conference. going to bring you that live coverage of the ecb's policy decision at 1:15 p.m. u.k. time. the news conference with ecb president christine lagarde half an hour later. the day ahead, a couple of items for your agenda. when it comes to the health of the german economy, that ties into the ecb story, we get the german ifo sentiment survey later today. for the month of january, the climate survey is expected to edge marginally higher after falling last month. when it comes to the u.s., gdp

is expected out later today. you are expected to see a 2% in crease quarter on quarter for the fourth quarter. bloomberg economics things the u.s. is already in some form of recession. on the corporate front, building up the semiconductor picture, we do have fourth-quarter earnings from intel. a big question for investors is will they have the confidence to provide a full-year forecast, and how much progress are they making catching up the likes of nvidia when it comes to ai chips? intel q4 earnings out later today. plenty more coming up. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." the u.s. federal reserve is

raising the rate on loans to banks issued under an emergency lending program launched last year. the move comes after borrowing from the scheme surged in recent weeks. effective immediately, the rate will not be lower than that of reserve balances. the fed's bank term funding program is due to end march 11th. the u.s. faa has halted further increases in boeing 737 max production. as part of an escalating response to quality lapses at the embattled planemaker. the regulators says a thorough inspection and maintenance process must be performed on each jet before it can be returned to service. boeing has come under scrutiny after a midair blowout earlier this month grounded scores of its max 9 planes. ibm shares jumped in late trade on a positive outlook for 2024. it also sees free cash flow at about $12 billion, above estimates, with sales growth in the mid single digits.

despite optimistic signals for the pace of corporate tech spending, ibm is still planning for the job cuts. rising geopolitical tensions are reshaping global trade. we discuss with the chief executive of indonesian conglomerate bakrie and brothers. it is part of bloomberg's new weekly deep dive, "terms of trade." this is bloomberg. ♪

tom: global markets are being transformed as technology, finance and geopolitics reshape the world. we are taking a weekly deep dive into the drivers behind the new world of global trade. for the first episode of bloomberg "terms of trade" i spoke to the ceo of bakrie & brothers, an indonesian conglomerate involved in everything from mining and construction to renewable energy and electric vehicles. i asked how the company navigates increasing geo-clinical tensions. >> first of all, we have to be cautious. in indonesia especially, we have always been active when it comes to tensions like this. but tension is there. indonesia would like to play a role in a good way to become a middle force to make sure that everybody can come to the table

and discuss. for example, in 2020 in g20 we were the president of g20. we got to have the two presidents, biden and xi, sit down. and we like that. in 2023, just last year, when we were the chairman of asean, which we are 60% of the population of 800 million people in asean. we promote the peace and stability. in general, indonesia has been starting to have confidence, and hopefully size and ability to bring down the tension, but the tension is there. we need to be really cautious because it will disrupt the supply chain. one more thing also, the mollica straight -- malabar strait is a place where we as a country are accustomed to having trade going

there. any tension on the other site of the world is certainly a cause of concern. at the same time, we have to think about how to manage the supply chain much better. tom: how does your business balance the tensions when it comes to china and the u.s., and the friction around trade between those two nations? >> we try to do as much as possible. at the same time, we need to make sure we cover both sides equally. as long as they also believe that this energy transition has to be done in an orderly manner. for example, let me give you one case. we are setting up this consortium called indo-pacific net zero battery materials. the idea is to process nickel battery materials with clean energy, supported by gas for the baseload in the beginning, and is sending it not only to the east but also the west. we believe this will open up new trade channels for indonesia.

yes, we're hoping to start with u.k. but we're also hoping one day indonesia can go to the u.s. and be in inflationary reduction act compliance. we think by doing that, indonesia can show, again, coming back as a middle power, a force in supply chain as well, including the battery materials supply chain. indonesia will also benefit greatly because less than 10 years ago, we were exporting ore. now we have to process it halfway. soon hopefully for away. now every single step of the way we at least double, quadruple in terms of value addition. in terms of gdp per capita for indonesia, it is a $1.3 trillion economy, it is still $4500. this value addition helps the rest of the country, especially the eastern part that is less developed, will be helpful for

indonesia to get to the level they want in terms of stronger economy. tom: you are not concerned at this point about ev demand. are you seeing any softness in ev demand? >> not really, because if you think about it, even indonesia alone, we're focusing on buses and trucks. buses in indonesia about 200,000, that is more than -- tom: that's in partnership with byd? >> to start we partner with byd, and we focus on trucks. the market in indonesia is five point 9 million trucks. by 2030, the government of indonesia has mandated that no more registration plates being issued if you are not ev. that's just one indonesia. the market itself is at least between a quarter trillion u.s. dollars to three quarter trillion u.s. dollars. i see this happening not only in indonesia but also southeast asia and of the world. yes, of course, europe and

america is going through some challenges but i think decarbonization is a must because this is about climate change. which 2023, we're not doing too well as a global citizen and so on. the pressure to continue to do whatever you can in terms of decarbonization will be there. tom: china a major trading partner for indonesia. we're seeing concerns about the health of the chinese economy. what demand are you seeing from your chinese customers for input prices for commodities, nickel in particular? >> in the u.s., for a sample, indonesia has been blessed to get investments including from china to process nickel to become stainless steel. eight years ago, it has become more than $30 billion. tom: is that market to china still growing? >> it is still going because the demand for stainless steel is still growing.

this is not taking into account the battery materials we are talking about. in battery materials, the value additions is far exceeding the stainless steel. the combination of the value additions increasing and china, while right now is going through just like the rest of the world some slowdown, it is still growing at the rate where it is above average then we see on the world. tom: that was anindya bakrie, the chief executive of bakrie & brothers on this week's "terms of trade." pay for most senior investment bankers at wall street firms in asia fell to 700,000 to 800,000 u.s. dollars. that is well below the million dollar plus typically earned since the return of the millennium. 20% of managing directors at banks including morgan stanley and ubs received no bonuses last year. zilch.

let's check on china because you are seeing another day of optimism on the back of these announcements that further support will come for these beleaguered markets. the context is the csi 300 benchmark is down 20% since august last year. you have the promise around applicable are cut on february 5, and further measures to support the property sector. you are seeing the hsi in hong kong up 2%, the csi 300 adding to the solid gains of yesterday, up 1.8%. the question for investors is how much is priced in terms of negative views around chinese equities? has a floor now been put under the chinese market. the ecb's first decision of the year, we get the details. this is bloomberg. ♪

tom: good morning, this is

"bloomberg daybreak: europe." i'm tom mackenzie in london. asia stocks in the green as investors weigh beijing's latest stimulus measures. meanwhile, the fed hikes rates on its emergency lending program cutting off a supply of cheap cash for commercial lenders. central bank bonanza. we get rate decisions from south africa, turkey and of course, the ecb. well christine lagarde offer fresh signals on rate cuts? we bring analysis this hour. plus, tesla shares skid off the road after it misses on fourth-quarter earnings. and warns of weaker sales growth for the year ahead. let's check on markets because there is that positive sentiment across the asian session. it is helped by the uptick coming through from mainland china and hong kong, once again on measures articulated by policymakers, as we let into the break i asked whether or not the

bad news has been fully baked in to the chinese equities story. whether the measures coming through, including the reserve ratio cut flag for february, will be putting a floor under chinese stocks? the benchmark csi 300 is adding close to 2%, after the gains of yesterday, the hsi in hong kong adding a little over 2%. when it comes to futures, european futures pointing lower, off 0.1% after the gains yesterday led by the tech companies like asml, and sap in germany. when it comes the u.s. futures, the s&p mini is pointing to modest gains. the context is you had that rally yesterday powered by the likes of netflix and chipmakers. we look ahead of the gdp print out of the u.s. and more earnings from the likes of intel. but also, when it comes to monetary policy in the euro zone, the important of the language from christine lagarde. we will get but context later in the show with verio taddeo. cross assets, let's have a quick

look as we think about the oil price. $80 a barrel, a one-month high for brent. inventories out of the u.s. coming in lower. shrinking at a record pace many had inspected. holding above $80 a barrel. we know geopolitics is a factor. to what extent is this an inflationary impulse? 4.15 on the u.s. 10-year, not a lot of movement so far, yields had edged higher yesterday. slightly different direction, there is money moving into u.s. treasuries in the session. 1.08 on the single currency, the euro in focus today as we passed the language -- parse the language from the ecb president later today. and 1.27 on the pound. not a lot of movement, but to what extent with the boe be an outlier in terms of central bank decisions is a question for investors. let's look at the market action with mark cranford from our and life team. let's start with the china

question. what is driving the rally for china stocks, have they found a bottom, is there conviction that finally these measures will come to bear? >> the most optimistic week we have had this year. it started with the chinese prime minister. he said it's time for measures to support the equity market. soon afterwards, there was talk of a big program to support chinese equities. then we had the reserve ratio reduction that was announced for february. now traders are optimistic that we will get the minimum lending facility reduced. that will be that big one. that comes up in about three weeks' time. the reason they will be excited is it immediately re-prices lending programs right across china. reserve requirements are good, they increase liquidity, but it is not an even playing field. some of that money will be used by big banks just to go into chinese government bonds. it won't really go back into the economy.

but if the mlf is cut, that will reset lending programs for small and big companies, everybody in the economy. that would be much more dramatic. since china seems to be giving something every day at the moment, traders are excited that an mlf cut will be coming soon, and possibly a china loan reserve ratio cut as well. those are in the next couple of weeks, and that's helping keep the markets going today. tom: important points to tie the medium term facility to the real economy. we watch for any moves, or any rhetoric policymakers on that potential decision. over the waters in japan, a soggy auction when it comes to jgb's, is this a canary in the coal mine for treasuries and european bonds? what do you read into the appetite for jgb's? >> japanese bonds are back. they will be the tail wagging the big dogs in the g10 world.

we haven't had to worry too much about japanese bonds for a long time, couple of decades almost. yields have been so low. but particularly because of this week's bank of japan meeting, the press conference especially, governor ueda actually sounded hawkish. he has a clear plan for exiting negative right policy. it is beginning to show up on a markets. we had a 40-your auction today. didn't go very well. had the worst tails for 14 years in the market. of course, doesn't tell you everything, but it means if people are giving up on japanese bonds. if there is trouble digesting because of negativity, that is likely to spread to treasuries and european bonds and the rest of the g10 space. it's early stages, but it looks as though it will be a difficult year for japanese bonds. some of that will definitely spill over to options in america and europe. keep your eye on japan, it

matters a lot more this year than it has for a long time. tom: japanese bonds, the tail now wagging the dog. always excellent analysis from our team in singapore. monetary policy, the ecb wrapping up decisions on his latest decision today. let's get back to our correspondent outside the headquarters in frankfurt. maria, what is your expectation of what we're going to see from the ecb today? maria: in terms of expectations, when you going to this meeting today, we know that no surprises in terms of the monetary policy decision we're expecting. the ecb likely to keep rates unchanged. they have stretched this theme of hire for longer, but the focus, the pulse of the markets, is on the cuts that will come in 2024. this will be a year of changing

dynamics for the european central bank. it's not a question of if, but really when, and to answer that, we have to look at two things. one is the head of the ecb herself and that interview she did with us in davos. she mentioned that it is quote highly likely that there will be a move that points to june. but also the amount of pushback almost collectively for the governing council against anyone pricing in rate cuts that could come in q1. this central bank, it will be interesting to see whether the double down on this, that does not appear to be an a rush but does not want to be rushed by markets is the message so far. as always a balancing act which can be difficult between the inflation and the fact that this is a mandate, the only mandate they have, but also the expectations for the european economy in a year that could be difficult for some countries, including the one we're in,

germany. tom: germany remains in focus today. we get the ifo data out later, that will give us some sense as to whether sentiment is turning more positive. it's a challenging picture for germany. what are you listening for when it comes to the press conference? if we do get pushback from christine lagarde in terms of market pricing, how forceful is that likely to be, what you listening for in terms of the language she uses? maria: as you say, from now on it really comes down to the press conference. or the next three months, if you take the head of the ecb at her word, this will still be an autopilot central bank that will keep rates unchanged. the focus will be on the recalibration in terms of the cuts. to me, it will be interesting to see whether she repeats the timeline she gave to bloomberg. saying it is highly likely that the move will come in the summer.

summer means june specifically. it will be interesting whether she doubles down on that message. it's also key, in terms of the assessment they make between the tension of inflation and the economy, whether she believes there are upside risks to the inflation outlook rate we see the situation in the red sea, will she mentioned that as an assessment of risks that persist, or will we see an ecb that is more optimistic? it will be about the recalibration of the language and whether we get more clues into the ecb cementing expectations for june. tom: it will be a busy day for maria in frankfurt. thank you for the preview. we will bring you live coverage of the ecb's policy decision at 1:15 p.m. u.k. time. mark that down if you haven't already. the news conference maria was talking about with ecb president christine lagarde comes half an hour after that decision.

also making use, the turkish central bank likely to raise one last time when it meets later today. an eighth consecutive height would take the keep borrowing cost to 45%. that would mean a total increase of a whopping 36.5 percentage points since last may, when they ditched that unconventional policy around their central bank. u.s. president joe biden has urged congressional leaders to approve the sale of f-16 warplanes to turkey. after the country agreed to allow sweden's entry into nato. biden had made turkey's approval of sweden's membership a prerequisite for the sale of the jets. hungary remains alone hold to the defense alliance's northern enlargement. two maersk container ships that were hauling u.s. government cargoes into the southern red sea have performed u-turns after a navy escort intercepted nearby

attacks. the latest unraveling in the red sea, i'm bringing you our reporter in tel aviv. bring us up to date on the latest of elements in the red sea. and whether the tensions are expected to remain within that region. >> yesterday we have been hearing the reports of an attack by iran that houthis on two u.s.-flagships carrying u.s. government cargo. two of the three missiles fired were intercepted by navy ships that were escorting these cargo ships. a third missile hit the water. these ships are controlled by a subsidiary of danish shipping giant maersk. who on their part announced almost immediately that they would suspend transit in the region for all their subsidiary firms. this means destruction in world

trade, shipping routes become longer, shipping costs rise. this has been affecting oil prices. we have seen at least three attacks from u.s. and the u.k. earlier this week on houthi targets in yemen. still the houthis are threatening to keep targeting ships with u.s., u.k. and israeli interests. they say this is an expression of solidarity with hamas in gaza , where israel has launched a war after the october 7 attacks, that has now been going on almost four months. there are still no clear signs on the houthis standing down. with back and forth fire being the present situation around the red sea. tom: meanwhile, in israel from a prime minister netanyahu said there is a initiative aimed at freeing hostages. what do we know? we know the frustrations amongst family members and relatives of hostages are very deep and

persistent. >> that is correct. there are multiple reports on negotiations between israel and hamas. some of them say there has been a detailed proposal put down to both sides for a permanent ceasefire, in return for hostage release. the plan in essence calls for the release of all remaining hostages that are held in hamas by gaza. whether they are dead or alive, the total number is presumed to be 132, with 28 already declared dead, and 104 presumably alive. in such a deal, israel would also release a number of palestinian prisoners and increase humanitarian aid into gaza.

this proposal has been sent to hamas and israel via qatar. the main obstacle is still the ceasefire and how long would it last. would it be a temporary ceasefire that would last several weeks, a month or two, or whether it would be a declaration by israel that this would be a more permanent ceasefire that would in essence stop the war. at this point, the israeli prime minister has been strongly objecting saying israel will not declare it is stopping the war. this remains the main obstacle. as you say, the families of the hostages are ramping up pressure on the israeli government. on prime minister netanyahu. reports say the israeli war cabinet is expected to convene today and discuss this proposal. tom: galit on the ground for us in tel aviv. let's check back on asian

markets with a lens on what's happening in china. the benchmark msci asia pacific adding 0.3%, but the enthusiasm is coming through when it comes to the benchmark. the csi 300, you can see gains of close to 2%. the shanghai comp adding a was 3%, building on upside yesterday, 83 points added. 2900. the csi 300 is still down 20% over the year. but it seems markets are seeing more conviction for now around the measures coming through from policymakers. the urgency we are seeing from officials in beijing to address the hammering that had been meted out. the hsi in hong kong, adding a full two percentage points. tesla chief executive elon musk strikes an upbeat tone. despite a growth warning. we take a closer look at the ev maker's earnings outlook. this is bloomberg. ♪

>> our market share is low, like japan for example. we should have market share proportionate to other non-japanese carmakers like mercedes or bmw. which we do not currently have. in japan, there is lack of awareness of tesla. tom: that was elon musk, you may have heard of him. the tesla chief executive speaking to investors on an earnings call overnight. for more earnings for tesla let's bring oliver click who has a finger on the pulse of the auto industry. let's start with the details that came through from this

earnings picture for tesla? how concerning should it be to investors? >> there is a lot of context that's probably required. the takeaway line will be the line that growth will be notably lower this year. they sold 1.8 million cars last year. analysts are affecting 2.2 million this year, that is still 20% growth. they didn't give guidance which is notable in and of itself. they are dealing with a number of headwinds. has to do with the slowdown in ev's and competition from china. and interest rates. on the call, elon musk said if interest rates come down quickly, margins will be good and if they don't, they won't be that good. simple enough. let's keep it in context. 6% off of the stock overnight. fine. the stock is up 1000% over the last five years. fourth best performer on the s&p 500, bigger than any company in europe, at 660 billion dollars. so not looking terrible for tesla. tom: context is important, and

they have that margin gain that is above the sector average. they talked about new releases. musk teased a potential new release. i was always concerned about the timelines around these pre-what details do we have on this potential new model? >> you are right to be concerned about it. some people are hanging their hopes on this being a out tension. this is tesla's move to the lower end of the market. their starting prices and the u.s. are 45,000, they have talked about something closer to $25,000. listen to what elon musk had to say about the production of this vehicle. >> that will be a challenging production ramp. we will be sleeping on the line practically. not practically, we will be. i am confident that once it is going, it will be head and shoulders above any other

manufacturing technology that exists anywhere in the world. next level. >> you are right to be wary about the timeline, but let's not forget with the tesla, it is not just that he made electric vehicles, he also reimagined the manufacturing process with his gigapresses printing larger parts of the car. if they can hack as it will be revolutionary. another thing we care about on production lines is the cybertruck, which we saw the first of last year. i don't know if you take a position on the cybertruck, tom. tom: i don't, but i am fascinated by the image of elon musk once again sleeping in one of his factories, as he ramped up production of this new model. china is another favorite of mine. they had this significant factory outside of shanghai. what did you tell us, not just you oliver, about the chinese market. >> across the board for the auto sector, this is interesting as you talk to even the chinese automakers, this will be a challenging year in china.

particularly for the non-lower end of the auto sector. i talked to a number of carmakers who don't necessarily want to set on air, but in terms of who they are, it's a challenging year, you know what i mean? for tesla, this is 20% of their revenue. there artemis to competitors there. we should mention how important china is to the ev market. bnef in terms of their forecast this year, they think that 60% of all ev sold next year will be in china. this is an absolutely huge market. we saw vw growth last year slowing down from the same for bmw. we haven't gotten the sales forecasts for these other automakers which i bet is a difficult thing to do this year. tesla didn't give a forecast, i doubt the others can get away with that. tom: 60% of ev sales executive be out of the chinese market. oliver crook with the details. the implications for tesla. stay with us. this is bloomberg. ♪

tom: happy thursday, welcome back to "bloomberg daybreak: europe." currently futures on the s&p pointing flat after gains of yesterday. i want to give you some warnings that are coming through. ed yardeni has been at this a long time. we have a chart breaking down the rapid response, the early part of the year in terms of the gains for the s&p, and how ultimately, that index ends the year. ed yardeni has a bullish forecast of 5400, the concern for ed is how rapidly the gains have come through on the s&p. just within the last 24 days

into 2024, and the s&p is already above the wall street consensus on where it will finish for the year. is that necessarily bad news? only in one of the years where we have had a previous strong run-up in the first few weeks, have you ended the year lower, that was 2018. out of the other examples we have, you still have a positive end to the s&p. flipping the board quickly, as another big day for chinese stocks. here the context. does the upside continue, or do you need that momentum around the economy to come through, e hasp traditionally had a correlation with the equity markets. iplenty more coming up including a preview of the ecb's policy decision. ♪

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